House-Flippers Gain Confidence in the High-End Market
For a long while, the luxury real estate market has been a no-man’s land for investors. It was hard enough to unload a cheap home without losing money, and the prospect of buying a mansion to fix up and flip for a profit simply was not in the cards. However, recent years has seen an improvement in the market, and ambitious property investors are once again working to buy, sell, and make out like bandits in the world of high-end houses.
The up and coming players in this recovering field have been the money lenders. While banks remain reluctant to provide house-flippers with the short-term, quick financing that they need, private lenders like Jan Brzeski have been stepping up to fill the need. Thanks to her loan, realtor Scott Ryan was able to buy a house for $1.5 million, improve the property for $600,000, and put in on the market for $3.3 million. In all-too recent memory, this house might have sat on the market for several years and several cuts in the asking price, but the current market is giving them optimism to secure a sale within a week.
According to Brzeski, he was originally wary of the high risk associated with high-end real estate investments. However, after pouring roughly $2.5 million into a venture back in 2011, he was pleased to discover that the realtor was met with a line of all-cash offers as soon as it was placed on the market. The property sold for $3.5 million, and Brzeski was sold on mansion-flipping immediately.
The causes behind this recent recovery in the high-end housing market seem to be based in the freshly robust stock market. With a slew of wealthy individuals suddenly flush with extra money, many of them are gaining confidence in buying the houses of their dreams. House-flippers are therefore gaining confidence that their riskier investments will pay off more quickly and more profitably.
Since 2011, flips of houses valued at upwards of $1 million have increased by about forty percent across the country. Between 2011 and 2012, such flipping jumped 456 percent in Phoenix, 867 percent in Orlando, and 730 percent in Las Vegas, according to RealtyTrac. These figures are based off of high-end homes that were bought and sold within six months.
Read the original article here.
